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Today's Hot Stories - March 02, 2011

10 Headlines for Today

(1) EC cracks the whip, bans free TV distribution in TN
(2) TMC, Congress begin seat-adjustment talks for Bengal elections
(3) US court summons Cong, Kamal Nath for 1984 riots
(4) Government panel moots 99% rebate on telecom fines
(5) Henkel India’s MD quits
(6) Steve Jobs launches Apple’s iPad2
(7) Lee Hesh pulls out of Davis Cup tie
(8) Bendtner hat-trick ends Orient dream
(9) Anastasia reaches quarters at Monterrey
(10) Barber gets Rs. 2.5 lakh in big, fat Gujjar wedding

5 Stories for Today

(1) Govt against mercy killing, AG tells SC
(2) Gadaffi warns West of bloodbath
(3) SEC charges Rajat Gupta with insider trading
(4) Libya crisis drives up oil prices
(5) SBI to retain retail over-subscription of bonds issue

(1) Govt against mercy killing, AG tells SC

The Centre has rejected the Law Commission's recommendation to allow terminally ill patients to choose death to end their suffering, attorney general G E Vahanvati told the Supreme Court on Wednesday. Opposing an euthanasia plea on behalf of Aruna Shanbaug, who has been in a vegetative state at KEM Hospital for 37 years, Vahanvati said that western parameters seldom applied to Indian conditions and culture. "We do not lead our terminally ill parents or kids to death. Who decides if one should live or die? Who knows tomorrow there might be a cure to a medical state perceived as incurable today? And won't leading the terminally ill impede pro-life medical research?" he argued. The SC will give its verdict on Monday. Euthanasia—"good death" in ancient Greek but popularly known as mercy killing—has been a taboo word in India, but allowed in the West. In its 126th report, the commission had recommended, "If a person is unable to take normal care of his body or has lost all senses and if his real desire is to quit the world, he cannot be compelled to continue with a painful life." The commission said that in such cases, it would be cruel not to permit a person to die. "Hence, a dying man who is terminally ill or is in persistent vegetative state can be permitted to terminate it by premature extinction of life." The AG disagreed and said that India was a country where people were poorer but more emotional than their western counterparts. He also said that euthanasia was fraught with danger as relatives could seek the death of a person to grab his property. He suggested that if relatives did not have the means to pay for a patient's treatment, the government must step in.

Agreeing with Vahanvati's apprehension, the bench quoted Shakespeare from Macbeth—"nearer, the bloodier". With social relationships eroding, people could misuse euthanasia in collusion with doctors, it said.

Amicus curiae and senior advocate T R Andhyarujina appreciated the efforts of lawyer Pinky Virani in bringing the euthanasia plea to court, but said that the nurses and staff of KEM Hospital who have been taking care of Aruna were the right people to talk about it. "And they have made no such plea," he said.

The bench said, "We respect Virani's efforts. The nurses and staff of the hospital took amazing care of her for 37 years, so much so that she does not even have a single bed sore."

The hospital's counsel, senior advocate Pallav Shisodia, said that the nurses and staff really loved Aruna and since they had not made such a plea, the court should dismiss Virani's petition and not decide any academic issue relating to euthanasia. "Euthanasia must be debated in public and Parliament and the court should not decide the sensitive issue by hearing five or six counsels," he said.

An expert panel comprising Dr J V Divatia, Dr Roop Gursahani and Dr Nilesh Shah, all of whom were present on Thursday, had examined 60-year-old Aruna and given two reports to the court, agreeing about her permanent vegetative state. But they had said she liked fish and chicken soup, calmed down while listening to devotional music and disliked crowding in her hospital room. "She accepts food in normal course and responds by facial expressions. She responds to commands intermittently by making sounds. She makes sounds when she has to pass stool and urine, which the nursing staff identifies and attends to by leading her to the toilet," the panel had said.

(2) Gadaffi warns West of bloodbath

Libyan strongman Muammar Gaddafi warned on Wednesday "thousands" would die if the West intervened to support the uprising against him, as rebels repulsed a huge attack by his forces on an eastern town.

Hours later, a fighter jet fired two missiles just metres from a square in Brega town, where rebels had been celebrating an alleged victory over pro-regime fighters, a reporter said. The attacks appear to signal that Gaddafi's forces are escalating a counteroffensive after government opponents over the past two weeks have seized control of the eastern half of the country and several cities and towns in the western half near the capital Tripoli.

Sanousi Jadran, a rebel volunteer fighter, said that Gaddafi's forces, backed by foreign mercenaries, had hit the town early in the morning. "They bombarded us with heavy weapons including air strikes," he said. "You see the Israeli attacks on Palestinians? This was worse."

Libyan dissidents who control part of the country's east called on the United Nations to order air strikes against mercenaries fighting for veteran ruler Muammar Gaddafi. "We're calling on the United Nations or any responsible international body for air strikes on the places and strongholds of the mercenaries," spokesman for the dissidents, Abdel Hafiz Ghoqa, told reporters in the eastern city of Benghazi.

Gaddafi's speech at a ceremony of loyalists in the capital Tripoli came as the UN refugee agency made a plea for hundreds of planes to airlift "acres of people" waiting in freezing conditions to cross the Libyan border into Tunisia. As two US warships steamed through the Suez Canal into the Mediterranean towards Libya, Nato allies were split on whether to unleash their military might to stop Gaddafi's reprisals against rebels. However, a British frigate, the HMS Westminster, sailed from Gibraltar, heading for Libya.

But speaking live on state television, Gaddafi warned that the "battle will be very, very long" if there is any intervention by foreign powers. "If the Americans or the West want to enter Libya, they must know that it will be hell and a bloodbath — worse than Iraq." Addressing "our friends in Europe and the West," he said that it is "not at all in their interest to shake the Libyan regime."

(3) SEC charges Rajat Gupta with insider trading

Federal regulators have charged a former Goldman Sachs board member with insider trading, saying that he provided confidential information to the central figure in a major hedge fund probe.

The Securities and Exchange Commission announced the civil charges against Rajat Gupta on Tuesday. The agency said that Gupta gave Raj Rajaratnam, the founder of the Galleon Group hedge fund, confidential information about quarterly earnings of Goldman and Procter & Gamble, where he is currently a board member. Gupta also is a board member of AMR Corp, the parent company of American Airlines.

The SEC also said that Gupta provided Rajaratnam with confidential information about Berkshire Hathaway's planned $5 billion investment in Goldman at the height of the financial crisis.

Rajaratnam used the information from Gupta to illegally profit in hedge fund trades, the SEC said.

Gupta's attorney, Gary Naftalis, wasn't immediately available for comment.

Rajaratnam, a one-time billionaire who is free on $100 million bail, is scheduled to go on trial next week in a probe that has resulted in criminal charges against more than 25 people. Of those, 19 have already pleaded guilty to charges, with the majority of them cooperating.

Prosecutors have said that Rajaratnam generated profits of more than $50 million by getting inside information about earnings statements by public companies and plans for mergers and acquisitions. He has pleaded not guilty and has maintained that he only traded on information that was already public.

The information on Goldman, provided in 2008, made Rajaratnam's funds $17 million richer, the SEC said. The Procter & Gamble data created illegal profits of more than $570,000 for Galleon funds managed by others, the SEC said.

Gupta was an investor in some of the Galleon hedge funds when he passed the information along, and he had other business interests with Rajaratnam that were potentially lucrative, the SEC said.

Jim McCarthy, a spokesman for Rajaratnam, declined to comment on the civil charges against Gupta.

The case against Gupta will be heard by an administrative law judge at the SEC. That proceeding will determine whether Gupta should pay restitution and civil fines and if he should be barred from serving as an officer or director of a public company, the SEC said.

The criminal securities fraud against Rajaratnam, who has both U.S. and Sri Lankan citizenship, was announced in October 2009 by federal prosecutors in Manhattan. Prosecutors described it as the largest hedge fund insider-trading prosecution in history. It was also described as the first time that investigators made extensive use of wiretaps in an insider-trading probe. The investigative tool is more traditionally used in drug and organization crime probes.

Late last year, prosecutors revealed that the Rajaratnam investigation had resulted in an expanded probe, focusing on those in the securities industry who provide insider information about public companies to hedge funds, but disguise the information as the product of research.

(4) Libya crisis drives up oil prices

Just when oil markets appeared to be calming, crude oil prices surged again on Tuesday as the potential for more oil shipment disruptions spread across the Middle East and North Africa.

With Libya's oil exports almost entirely halted for the last several days, renewed unrest in Oman, Iran and Iraq rattled oil traders. An interruption of shipments from any of those countries would further tighten oil supplies, even as Saudi Arabia has rushed to fill the vacuum of Libyan supplies by pumping more oil from its fields.

The worries about the oil supply rippled through other markets, with stock markets turning lower on concerns that the higher cost of energy would slow economic recovery.

Gold prices also surged on the latest reports, and indexes on Wall Street declined sharply, with the Dow Jones industrial average down more than 1.3 percent. The Saudi Arabian benchmark stock index fell 6.8 percent.

In the latest sign that the political contagion was spreading, demonstrators in Oman on Tuesday tried to block a major road leading to the industrial port town of Sohar. Protesters in recent days have set fire to at least one police station and two government office buildings in the normally stable Persian Gulf country, which is ruled by a family dynasty and is the largest non-OPEC oil producer in the Middle East.

"To have protests in Oman, which had previously been seen as a sleepy gulf kingdom, heightens concerns that nowhere is immune from the contagion affects," said Helima L. Croft, a director and senior geopolitical analyst at Barclays Capital. "Every day we seem to have a new country with a new problem."

Oman produces 860,000 barrels of oil daily, almost 1 percent of world supplies, and its production has been rising in recent years with investments from Royal Dutch Shell, BP, Repsol and other international companies. Its importance is magnified by the fact that its crude is of such quality that it can be blended by most refineries around the world, although most of its exports now go to China and Japan.

Oman straddles the Strait of Hormuz, a strategic route through which 40 percent of the world's oil tanker traffic crosses. On the other side of the strait lies Iran, another major producer, where there were reports on Tuesday that security forces had used tear gas to disperse protesters in Tehran. Iran, with approximately 10 percent of the world's oil reserves, exports about 3.7 million barrels a day.

The price of light sweet crude rose to $99.63 a barrel while Brent crude rose 3.24 percent to $115.42. Oil jumped above $100 a barrel in after-hours trading in New York. The national average price for a gallon of regular gasoline rose by nearly a penny on Tuesday to just over $3.37, which is 20 cents higher than a week ago.

In testimony on US Capitol Hill, Federal Reserve chairman Ben S. Bernanke said that it would take a sustained increase in oil prices to push up consumer inflation significantly and threaten the economy. "Currently, the cost pressures from higher commodity prices are being offset by the stability in unit labor costs," he added.

The rising tensions across the region sent the Saudi Arabian stock market into a tailspin, with Saudi shares suffering the biggest daily decline in more than two years despite rising oil prices. The Saudi index fell 6.8 percent, to its lowest close since July 2009. Refiners around the world have been hoping that Iraq, as violence ebbed, would again become a major oil producer, with production stabilizing at 2.3 million barrels a day. But over the weekend, rebels bombed the country's largest refinery, reducing the refinery's capacity to refine petroleum products by 75,000 barrels a day. The attack came less than three weeks after a terrorist attack on a pipeline leading to a second refinery north of Baghdad.

Greg Priddy, an oil analyst at the Eurasia Group, a political risk consultancy, said that it was "highly unlikely" that output in another major producer in the region would be shut off. But he said that markets were jittery because "if the Saudis are going to make up for the shortfall in Libya, their spare capacity is thinner."

He added, "Another major country going out completely would use most of their spare capacity, and that is really what the market is worried about."

Saudi Arabia has a total production capacity of 12.5 million barrels a day, and currently produces nine million barrels after increasing its output by several hundred thousand since the beginning of the year. Saudi officials say that they are ready to pump what it takes to fill any supply gap, but much of its 3.5 million barrel excess capacity contains sour crudes that do not easily replace the Libyan sweet crude European refineries, in particular, desire to produce diesel. In Libya, major oil operations in the eastern part of the country remained under the control of rebel forces. While foreign operators withdrew most of their foreign workers, local Libyan employees can still produce some crude. Oil experts say that at least one million of the country's 1.6 million barrels a day of production has been shut down.

Little if any oil can be shipped out of Libya because most ports were closed. Meanwhile, storage tanks were filling up rapidly. Oil traders said that one major oil company cargo ship was supposed to berth this week, but no one was at the port to deliver an oil shipment, and shipping companies were reluctant to send ships into the Libyan ports.

(5) SBI to retain retail over-subscription of bonds issue

State Bank of India said that it is planning to retain the retail over-subscription to its tax- saving bonds issue, which will take the total amount raised through the mega issue up to Rs 5,500-crore.

"We will retain up to may be Rs 5,500-crore...the rest we will return," Bank Chairman O P Bhatt said on the sidelines of an IBA conference.

As against an allocated Rs 1,000-crore, subscriptions from retail investors are at Rs 4,500-crore, while an additional subscription of nearly Rs 4,000-crore has come from other investors including high net individuals.

"Our terms of issue is such that in the retail segment, we could take as much as we want up to Rs 10,000-crore and while from other investors, we can take up to Rs 1,000-crore," Bhatt explained.

The issue, which had opened on February 21, closed yesterday. Investors were attracted to the issue because of its competitive coupon rate and the timing, which came during the end of the fiscal when individuals do tax saving investments. This issue is part of the Rs 10,000-crore retail bond programme SBI has planned for FY 11 through FY 12. Already the bank had raised Rs 1,000-crore in the first tranche of the issue last October, which was oversubscribed 19 times. That was the first retail bond offering in the country by a corporate entity. The bank is offering 9.75 per cent to retail investors on the 10-year bonds, and 9.3 per cent for non-retail applicants. These bonds carry a call option in the fifth year. For the 15-year bonds, the coupon is 9.95 per cent to retail investors and 9.45 per cent to non-retail investors. These bonds have call option in the tenth year.

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